Chinese Government-Bond Yields Are Rising, a Sign of More to Come as Beijing Revamps the Financial System

Yields on Chinese 10-year government bonds rose to over 4.7% last week, their highest level since 2004. Rates have since come down a bit, but they remain high, more than a percentage point above where they were in the first half of the year, despite little change in the growth outlook.

Something else is going on. Investors are preparing for higher and more volatile...